Malik Riaz Hussain bought his way to becoming possibly the most powerful man in Pakistan. Political leaders, bureaucrats, journalists and military generals are said to be in the pocket of the millionaire property tycoon – all the way up to the president and army chief.

Now a new scandal involving Hussain has embroiled the only public institution in this nation – a troubled U.S. ally – that was considered clean: the judiciary.

A lawyer for Hussain alleged Tuesday in Pakistan’s Supreme Court that Arsalan Iftikhar, the son of the court’s crusading chief justice, took about $3.6 million in cash and paid holidays to London and Monte Carlo in 2010 and 2011 in return for promising to fix court cases in favor of the businessman. Iftikhar has called the accusations “frivolous and unfounded,” but the controversy threatens to destroy the moral authority of his father, Chief Justice Iftikhar Chaudhry, and the rest of the judiciary – the institution that many in Pakistan feel is the only thing stopping the country from sliding into all-out anarchy.

Pakistan has reeled from legal crises all year, as the courts under Chaudhry have humiliated the government of President Asif Ali Zardari over alleged corruption and hounded the military over alleged human rights abuses. Islamabad’s relations with Washington also have plummeted over an escalating series of confrontations that prompted Pakistan to close supply routes used by the U.S.-led coalition in Afghanistan. Some in Congress called for cutting U.S. aid that Pakistan says it needs to keep a lid on militants.

The latest judicial intrigue has badly embarrassed the chief justice and transfixed even scandal-weary Pakistan.

“This brings everything down to a more cynical level. The self-created towers of virtue don’t seem to be so shining now,” said Ayaz Amir, a member of parliament for the main opposition party. “If anyone should have been careful, it should have been the chief justice.”

Hussain, a millionaire property developer, stands accused of a long list of crimes, with some 100 cases currently before the courts, ranging from murder to land-grabbing. He also has a relationship with Islamic extremists. His Bahria Town company provided a luxurious house for radical cleric Abdul Aziz. In addition, he’s on good terms with the leadership of the main opposition party.

A brother of the army chief, Gen. Ashfaq Kayani, is reportedly in a lucrative business partnership with Hussain, and it was shown in court last week that Hussain keeps at least two retired generals and several other retired military officials on his payroll.

Prime Minister Yousuf Raza Gilani said this week that Hussain is “close to everyone.”

It’s unclear who’s behind the tycoon’s risky assault on the judiciary. Many believe that Zardari instigated the furor, as his enemies in the media, the judiciary and the military have all been badly sullied by it. One possible sign of the government’s leanings was the official security detail accorded to Hussain Tuesday outside the Supreme Court – plainclothes and uniformed officers deployed in force – which was no less than that given to the prime minister in court appearances earlier this year.

However, in court last week, the chief justice appeared to agree with a witness who suggested that the military’s intelligence agencies were behind the campaign against his son, saying, “Now you are going in the right track.”

After media reports last week first implicated Iftikhar, 32, the chief justice called hearings and then recused himself from the panel of judges hearing the case.

So far, there’s been no suggestion that Chaudhry benefited financially from Hussain’s alleged dealings with Iftikhar, or that the money led to favorable treatment by the courts.

Chaudhry took on the country’s last military dictator and is widely lauded as a hero in Pakistan. He has hauled military and intelligence officials up before the courts on charges of ordering extrajudicial executions and forced the prime minister to answer charges he shielded the president against corruption accusations. In April, the Supreme Court ruled that Gilani should be disqualified from office – though he remains in the job.

But many in Pakistan are asking how Chaudhry could have failed to notice that his son was amassing wealth.

In an 83-page submission to the court, Hussain claimed that Iftikhar “victimized and blackmailed” him and failed to deliver on promises to get him “relief” from the court cases pending against him. Hussain said he picked up a $163,000 tab for three holidays and separately paid $3.4 million in cash to Iftikhar in four installments, although he didn’t offer any proof of paying the cash.

In court papers, Iftikhar admitted that someone else paid about $47,000 for his stays in London but that he repaid the money. But the rent was initially paid by Zaid Rehman, who appears to have links to Hussain and Bahria Town. Iftikhar’s mother and sisters accompanied him on at least some of the trips, raising further questions about how the chief justice was not suspicious of the lavish visits.

Chaudhry was removed from his job in 2007 by the then U.S.-backed military ruler of Pakistan, Gen. Pervez Musharraf. That led to a popular movement led by thousands of lawyers for his restoration to office, turning him into an icon. After Zardari’s party won elections in 2008, he bowed to more protests and made Chaudhry chief justice again in March 2009.